Friday, August 05, 2016

What Happens When 
Rampant Asset Inflation Ends?
Charles Hugh Smith* thinks the collapse of asset inflation will implode all the fiscal & financial promises based on ever-inflating assets .. asset inflation is visible in stocks, bonds & real estate .. The sources of asset inflation are highly visible: soaring central bank balance sheets, credit expansion that far outpaces GDP growth and ZIRP (zero interest rate policy) .. "There are only two ways to keep asset inflation alive: one is for central banks and states to buy up major chunks of all asset classes, i.e. hitting every higher bid regardless of the risks of such a strategy, and the second is to pay households to borrow money to chase future asset inflation, for example, paying households to buy a house with a mortgage: The insanity of these two strategies is no hindrance to their implementation."
LINK HERE to the essay

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